Daily US Stock Market Fundamental & Technical Analysis

Daily fundamental and technical analysis of the US stock market by full time hedge fund manager and options guru, Master Jason Ng (owner and author of Optiontradingpedia.com). Serving investors daily since March 2006.

Stock Market Analysis

Monday, November 23, 2009

Suspicious Start for the Week

What a great start to thanksgiving week with the Dow gaining 132 points on encouraging Durable goods order and Jobless Claims.

The US Market launched to a great start as Durable goods orders and jobless claims beat expectations (see Stock Market Calendar), fuelling the recovery scenario. This extreme optimism was echoed by the total equities Put Call Ratio ditching by 25 points today from almost par to extreme call options trading. However, what was lacking today was volume. Volume was light as expected of the thanksgiving week and such aggressive buying on both the stocks and options front tells me that perhaps some institutions are trying to create a rush in this thanksgiving week. Whether retail investors and traders take the bait is still left to be answered but there is no doubt that today's rally once again pushed the Dow back up to that uncomfortable, shaky, peak. From the trading patterns, I have no doubt that investors and institutions are still trying to take profit prior to the holiday but wants to do so in style.

From the lack of volume going into today's rally and sudden surge in call options trading, I have no doubt that the tide will turn and the 10,000 points level retested.

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